In South Africa thousands of property transfers take place daily. People purchase land to live on, to conduct business on or merely to keep as an investment. Here are some of the steps typically involved in the transfer of a residential property:
An offer to purchase is signed by the buyer and the seller. Once signed the buyer needs to obtain the necessary financing for the value of the purchase price if the buyer does not have sufficient funding on hand.
A transferring attorney (conveyancer) is usually appointed by the seller, who will request FICA (identity document and proof of address) from both parties.
If there is an existing bond over the property, the transferring attorney will apply for the seller’s bond cancellation figures which is the amount required to settle the seller’s bond. The bank will instruct a bond cancellation attorney who is on their panel to attend to the cancellation.
The transferring attorney will request rates clearance figures from the relevant municipality to ensure that all the seller’s rates and taxes are paid up to date. The municipality will issue rates clearance figures for two months in advance and will issue a rates clearance certificate which is required for lodgement after payment of the rates clearance figures.
The transferring attorney will also request a transfer duty receipt from the South Africa Revenue Services (SARS). The purchaser must pay SARS transfer duty if it is above the threshold and if it is not exempt from transfer duty. Transfer duty the tax which is levied on a property that is sold.
If the buyer had to apply for a bond, then the buyer will instruct a bond attorney to register a mortgage bond over the property. The transferring attorney will then request a guarantee from the bond attorney should there be a debt owed on an existing bond
Once all the documentation is prepared by the transferring attorney and the bond attorney, the seller and buyer will sign the transfer documentation.
The transferring attorney will then contact both the cancelling attorney and bond attorney to arrange for simultaneous lodgement of documents at the Deeds Office.
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